Other Financial Institutions

The European Investment Bank

The European Investment Bank (EIB) is the long-term investment bank of the European Union. It lends money to projects that contribute to the integration, development and economic and social cohesion of the EU Member States and otherwise advance the EU’s policy objectives.

Much of the EIB’s lending is for projects outside of the EU. In recent years, the EIB has supported a number of large dam projects in the developing world, mostly in Africa and Southeast Asia. Unlike other multilateral development banks such as the World Bank and Asian Development Bank, the EIB has no clear environmental and social safeguard policies. It also has no comprehensive sector policy on dams. And with only three environmental specialists on staff, EIB also has a critical lack of capacity to assess potential projects and to monitor their impacts.

The EIB committed at the 2002 Earth Summit to integrate European Union climate change objectives into its policies and practices. The EIB later set an objective that by 2010, 50 percent of its energy lending within the EU will be directed to renewable energy and energy efficiency. Although the EIB claims to have financed 24 renewable energy projects outside Europe in the past decade, most of these are large dams that are non-compliant with the World Commission on Dams recommendations (and in some cases, also non-compliant with World Bank guidelines).

The EIB will sometimes approve a project before impact assessments of the proposed project are complete, or before all outstanding issues have been addressed (as for example with the Bujagali Dam, which was approved with major outstanding concerns still under investigation by the World Bank Inspection Panel). 

The African Development Bank

The African Development Bank (AfDB) is a public development bank that lends money to African governments and private companies investing in Africa. While the AfDB is a relatively small player compared to the World Bank, its lack of citizen participation and the unequal balance of power in development decision-making often lead to projects and policies that harm communities and the environment, waste public funds, or serve the interests of political and economic elites rather than those of the poor.

Often working closely with the World Bank and other lenders, the AfDB is already involved in or considering support for destructive dam projects such as Bujagali in Uganda, Inga in the DRC, and Gibe 3 in Ethiopia. Over the coming years, the AfDB hopes to scale-up its support for large infrastructure projects like big dams and regional transmission links. These trends are cause for concern, especially considering the AfDB's lack of transparency and capacity to manage and supervise environmentally and socially projects.

LATEST ADDITIONS:

World Bank's Program-For-Results Loan Instrument: Good Intentions?

Hydroelectric power: Spate of dam building meets resistance

How the Global 1% Shape the World’s Development Agenda

World Bank to Back African Dams in New Energy Strategy

Along With Power, Questions Flow at Laos's New Dam

CONTACT US:

Zachary Hurwitz
zachary [at] internationalrivers [dot] org
+1 510-848-1155